The Mortensen rule and efficient coordination unemployment
AbstractWe study the implementation of constrained-efficient allocations in labour markets where a basic coordination problem leads to an equilibrium matching function. We argue that these allocations can be achieved in equilibrium if wages are determined by ex post bidding. This holds true even in finite sized markets where the equilibrium matching function has decreasing returns to scale â where the âHosios ruleâ does not apply â both with and without heterogeneity. This wage determination mechanism is similar to the one proposed by Mortensen (1982) in a different setting
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Bibliographic InfoArticle provided by Elsevier in its journal Economics Letters.
Volume (Year): 90 (2006)
Issue (Month): 2 (February)
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Web page: http://www.elsevier.com/locate/ecolet
Other versions of this item:
- John Kennes & Benoit Julien & Ian King, 2002. "The Mortensen Rule and Efficient Coordination Unemployment," Macroeconomics 0206001, EconWPA.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D45 - Microeconomics - - Market Structure and Pricing - - - Rationing; Licensing
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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